Insufficient Proof for Application of the Special Facts Rule

In Rocky Point Drive-in v. Town of Brookhaven, 21 N.Y.3d 729, the Court of Appeals affirmed the long-established rule that where a zoning law is amended after the submission of an application for land use approval, but before a decision is rendered on the application, the courts are bound to apply the amended law.

Background

The centerpiece of the Rocky Point appeal was the plaintiff's assertion that the “special facts” exception to this general rule should have applied. Under this exception, the amended law will be found inapplicable when the applicant establishes both that: 1) it was entitled to a permit as a matter of right by virtue of its full compliance with the permit requirements under the law in effect at the time of the application and that proper action upon the permit by the municipal entity would have given the applicant time to acquire a vested right; and 2) the reviewing municipal board unduly and deliberately delayed the application as a result of bad faith, malice, oppression, manipulation or corruption. See, e.g. Alscot Investing Corp. v. Inc. Vill. of Rockville Centre, 64 N.Y.2d 921, aff'g, 99 A.D.2d 754; Mascony Transp. & Ferry Serv. Inc., v. Richmond, 49 N.Y.2d 969, aff'g, 71 A.D.2d 826; Pokoik v. Silsdorf, 40 N.Y.2d 769.

The plaintiff argued that it satisfied this two-prong test, but if it did not, the test should be revised so that: 1) “selective enforcement” of the prior zoning ordinance instead of an “as of right” entitlement would replace the first prong; and 2) that negligence, instead of deliberate and malicious acts, would replace the second prong.

In the Court

The Court of Appeals rejected the plaintiff's arguments, stopping its inquiry at the first prong, because the plaintiff never proved an “as of right” entitlement under the traditional test or selective enforcement under the proposed test.

Facts of the Case

The parcel at issue was zoned J-2, which allowed retail uses, but prohibited commercial centers, defined as retail uses utilizing five acres or more.

The Town Board created a Commercial-Recreational (CR) floating zone as a result of Comprehensive Plan recommendations seeking to preserve uses such as the drive-in theater and, later, driving range located on this parcel. Rocky Point was the first parcel of several to which the Town Board applied the CR zone during the course of a year.

Subsequent to the zone change notice and prior to the public hearing, Rocky Point submitted a site plan application to construct a Lowe's Home Improvement Center, utilizing over five acres. Upon receipt of the Lowe's site plan application, the Planning staff wrote to the applicant informing it that the proposed Lowe's was prohibited in the J-2 District, and asking how it wished to proceed. The staff sought to learn whether the applicant preferred to seek a variance from the BZA or a zone change from the Town Board.

Crucially, Rocky Point never responded to the Planning Department staff letter. Rather, Rocky Point chose to litigate and challenge the re-zoning to CR.

The Applicant's Delay

Eventually, six and one-half months after the non-conforming site plan application was filed, counsel for the Town and Rocky Point entered into a court-ordered stipulation whereby the applicant was to apply for a use variance and the Town would process it throughout the litigation challenging the CR zone (the Stipulation).

The use variance application was not submitted to the BZA until two and one half months after the Stipulation. Once the application was submitted, the BZA immediately issued a resolution assuming lead agency status, issuing a positive declaration and requiring a Draft Environmental Impact Statement (DEIS). The Applicant waited to submit its DEIS until almost eight months from the date of the positive declaration.

The time between the site plan application and the Stipulation, and the delays in submitting both the variance application and the DEIS totaled 17 months.

Given these facts, the Second Department reversed the trial court on the facts and found no evidence of delay on the part of the Town. As a result, the Second Department had no reason to consider whether delay needed to be malicious to satisfy the special facts rule.

Selective Enforcement

The unanimous Court of Appeals focused on the fact that Rocky Point had not met the first prong of the special facts test, i.e., “the threshold requirement that it was entitled to the requested land use permit under the law as it existed when it filed its application,” Thus, the court never reached the delay issue.

Without deciding whether “selective enforcement” could ever obviate the need to demonstrate an “as of right” entitlement to a permit under the first prong, the Court of Appeals ruled that in Rocky Point, there was insufficient evidence of selective enforcement. The unanimous court held that “[t]he record clearly demonstrate[d] that [the alleged] similarly situated applicants ' were not similarly situated at all; they either fell within an exception or were within compliance with the J-2 zoning classification.” Indeed, plaintiff's examples of other land use applications mostly consisted of pre-existing, grandfathered shopping center uses that were permitted to expand beyond five acres in compliance with the Town's Comprehensive Plan, which favored renovation of existing and often abandoned retail centers, as opposed to the construction of new ones, in order to alleviate blight.

Since it did not need to go further than the first prong, the Rocky Point court did not reach the question of delay or whether negligent delay could substitute for malicious or deliberate delay. Judge Jenny Rivera rejected Rocky Point's “significant reliance on [the] decision in Matter of Faymor Dev. Co. v. Board of Stds. & Appeals of City of N.Y. in support of its [negligence] argument” as follows:

In Faymor the applicant would have had, in the absence of municipal wrongdoing, a vested right. Here, as Rocky Point concedes, it cannot meet the zoning requirements and did not have a vested right. Rocky Point has failed to meet the threshold requirement of entitlement as of right, and we have no reason to upset the Appellate Division's factual findings of a lack of record support for selective enforcement by the Town, because the special facts exception is inapplicable to his case, under any standard.

Maureen T. Liccione is partner of Jaspan Schlesinger LLP, and has practiced land use and municipal litigation for over 30 years. Ms. Liccione represented the Town in the Rocky Point case. At the time of the Court of Appeals argument, she was special counsel to Annette Eaderesto, the Brookhaven Town Attorney. The facts recited are those in the Town respondents' brief to the Court of Appeals.

In Rocky Point Drive-in v. Town of Brookhaven , 21 N.Y.3d 729, the Court of Appeals affirmed the long-established rule that where a zoning law is amended after the submission of an application for land use approval, but before a decision is rendered on the application, the courts are bound to apply the amended law.

Background

The centerpiece of the Rocky Point appeal was the plaintiff's assertion that the “special facts” exception to this general rule should have applied. Under this exception, the amended law will be found inapplicable when the applicant establishes both that: 1) it was entitled to a permit as a matter of right by virtue of its full compliance with the permit requirements under the law in effect at the time of the application and that proper action upon the permit by the municipal entity would have given the applicant time to acquire a vested right; and 2) the reviewing municipal board unduly and deliberately delayed the application as a result of bad faith, malice, oppression, manipulation or corruption. See, e.g. Alscot Investing Corp. v. Inc. Vill. of Rockville Centre , 64 N.Y.2d 921, aff'g, 99 A.D.2d 754; Mascony Transp. & Ferry Serv. Inc., v. Richmond , 49 N.Y.2d 969, aff'g, 71 A.D.2d 826; Pokoik v. Silsdorf , 40 N.Y.2d 769.

The plaintiff argued that it satisfied this two-prong test, but if it did not, the test should be revised so that: 1) “selective enforcement” of the prior zoning ordinance instead of an “as of right” entitlement would replace the first prong; and 2) that negligence, instead of deliberate and malicious acts, would replace the second prong.

In the Court

The Court of Appeals rejected the plaintiff's arguments, stopping its inquiry at the first prong, because the plaintiff never proved an “as of right” entitlement under the traditional test or selective enforcement under the proposed test.

Facts of the Case

The parcel at issue was zoned J-2, which allowed retail uses, but prohibited commercial centers, defined as retail uses utilizing five acres or more.

The Town Board created a Commercial-Recreational (CR) floating zone as a result of Comprehensive Plan recommendations seeking to preserve uses such as the drive-in theater and, later, driving range located on this parcel. Rocky Point was the first parcel of several to which the Town Board applied the CR zone during the course of a year.

Subsequent to the zone change notice and prior to the public hearing, Rocky Point submitted a site plan application to construct a Lowe's Home Improvement Center, utilizing over five acres. Upon receipt of the Lowe's site plan application, the Planning staff wrote to the applicant informing it that the proposed Lowe's was prohibited in the J-2 District, and asking how it wished to proceed. The staff sought to learn whether the applicant preferred to seek a variance from the BZA or a zone change from the Town Board.

Crucially, Rocky Point never responded to the Planning Department staff letter. Rather, Rocky Point chose to litigate and challenge the re-zoning to CR.

The Applicant's Delay

Eventually, six and one-half months after the non-conforming site plan application was filed, counsel for the Town and Rocky Point entered into a court-ordered stipulation whereby the applicant was to apply for a use variance and the Town would process it throughout the litigation challenging the CR zone (the Stipulation).

The use variance application was not submitted to the BZA until two and one half months after the Stipulation. Once the application was submitted, the BZA immediately issued a resolution assuming lead agency status, issuing a positive declaration and requiring a Draft Environmental Impact Statement (DEIS). The Applicant waited to submit its DEIS until almost eight months from the date of the positive declaration.

The time between the site plan application and the Stipulation, and the delays in submitting both the variance application and the DEIS totaled 17 months.

Given these facts, the Second Department reversed the trial court on the facts and found no evidence of delay on the part of the Town. As a result, the Second Department had no reason to consider whether delay needed to be malicious to satisfy the special facts rule.

Selective Enforcement

The unanimous Court of Appeals focused on the fact that Rocky Point had not met the first prong of the special facts test, i.e., “the threshold requirement that it was entitled to the requested land use permit under the law as it existed when it filed its application,” Thus, the court never reached the delay issue.

Without deciding whether “selective enforcement” could ever obviate the need to demonstrate an “as of right” entitlement to a permit under the first prong, the Court of Appeals ruled that in Rocky Point, there was insufficient evidence of selective enforcement. The unanimous court held that “[t]he record clearly demonstrate[d] that [the alleged] similarly situated applicants ' were not similarly situated at all; they either fell within an exception or were within compliance with the J-2 zoning classification.” Indeed, plaintiff's examples of other land use applications mostly consisted of pre-existing, grandfathered shopping center uses that were permitted to expand beyond five acres in compliance with the Town's Comprehensive Plan, which favored renovation of existing and often abandoned retail centers, as opposed to the construction of new ones, in order to alleviate blight.

Since it did not need to go further than the first prong, the Rocky Point court did not reach the question of delay or whether negligent delay could substitute for malicious or deliberate delay. Judge Jenny Rivera rejected Rocky Point's “significant reliance on [the] decision in Matter of Faymor Dev. Co. v. Board of Stds. & Appeals of City of N.Y. in support of its [negligence] argument” as follows:

In Faymor the applicant would have had, in the absence of municipal wrongdoing, a vested right. Here, as Rocky Point concedes, it cannot meet the zoning requirements and did not have a vested right. Rocky Point has failed to meet the threshold requirement of entitlement as of right, and we have no reason to upset the Appellate Division's factual findings of a lack of record support for selective enforcement by the Town, because the special facts exception is inapplicable to his case, under any standard.

Maureen T. Liccione is partner of Jaspan Schlesinger LLP, and has practiced land use and municipal litigation for over 30 years. Ms. Liccione represented the Town in the Rocky Point case. At the time of the Court of Appeals argument, she was special counsel to Annette Eaderesto, the Brookhaven Town Attorney. The facts recited are those in the Town respondents' brief to the Court of Appeals.